Strong Container Demand Pushes Maersk Line’s Profit Up
Danish shipping giant Maersk Line reported a net profit of USD 584 million in 2017, against a net loss of USD 376 million seen a year earlier.
The company’s revenue for the year increased by 14.9% to USD 23.8 billion, from USD 20.7 billion reported in 2016, driven by an 11.7% increase in the average freight. Underlying profit for the period was at USD 521 million, against a loss of USD 384 million.
The year was challenged by a cyber-attack and bunker price increases, however, Maersk Line returned to profit with a significant improvement compared to the disappointing 2016.
The global container demand was strong in 2017, despite a slowdown in the second half of the year following a strong first half, which resulted in increased freight rates compared to the previous year. Maersk Line grew volumes by 3% to 10,731k FFE, compared to 10,415k FFE, despite the negative impact of the cyber-attack.
The volume increase was driven East-West by 2.4%, North-South by 2.2% and Intra-regional by 7.3%. The rise reflects a strong market demand, with estimated growth of around 5% compared to 2016.
The Maersk Line fleet consisted of 287 owned vessels and 389 chartered vessels with a total capacity of 3,564k TEU by the end of 2017, an increase of 10% compared to the end of 2016. The rise is partly due to more capacity being deployed to accommodate the incoming volumes from the slot purchase agreement signed in Q1 2017 with Hamburg Süd and Hyundai Merchant Marine.
Idle capacity at the end of 2017 was 24.1k TEU (three vessels), which was flat compared to 24.7k TEU of idle capacity at the end of 2016.